Lidl overtakes Waitrose as seventh-biggest supermarket

Lidl enjoyed an 18.9% surge in sales to overtake Waitrose. Picture: Kimberley Powell

The German retailer increased its market share to a record high of 5.2 per cent over the 12 weeks to 13 August, according to researcher Kantar Worldpanel, as ten million households visited its expanding network of stores.

It increased sales by 18.9 per cent overall, with alcohol and fresh produce performing particularly well.

Aldi was not far behind with sales growth of 17.2 per cent, attracting 1.1 million more shoppers than this time last year and increasing its market share to 7 per cent.

The discounters’ success coincides with like-for-like grocery inflation increasing slightly to 3.3 per cent after holding steady at 3.2 per cent for the past two months.

At the current rate, price increases could add a further £138 to the average household’s annual grocery bill, with the price of butter and fish most affected, Kantar said.

Overall supermarket sales grew by 4 per cent year-on-year, although the disappointing summer weather saw sales of ice cream fall 9 per cent and burgers slump by 25 per cent – an £8m loss year-on-year.

200 Voices: find out more about the people who have shaped Scotland

All four of Britain’s biggest grocers managed a growth in sales for the fifth consecutive period, a run of collective success not seen since 2013.

However, pressure from the discounters means they now account for just 69.3 per cent of the UK grocery market, down from 76.3 per cent five years ago.

Tesco saw overall sales grow by 3 per cent but its market share fell to 27.8 per cent, while Morrisons increased sales by 2.6 per cent as its market share dropped slightly to 10.4 per cent and Sainsbury’s sales rose by 2 per cent as its share fell to 15.8 per cent.

Asda sales were up 1.4 per cent during the quarter, and Waitrose’s market share held steady at 5.1 per cent as it increased sales by 2.8 per cent year-on-year, continuing an unbroken run of growth since March 2009, but the Co-op’s sales declined by 0.4 per cent as its market share fell to 6.3 per cent.

Fraser McKevitt, head of retailer and consumer insight at Kantar Worldpanel, said: “Lidl is growing sales 40 per cent faster with families than with households without children.

“Families tend to buy more items each time they shop, so strong growth with this demographic has helped Lidl to increase its average basket size year-on-year.”

Meanwhile, figures from Nielsen also show the return of cooler weather and the exodus of people on summer holidays combined to bring a halt to two months of impressive sales growth for the UK’s leading supermarkets.

Following the highest year-on-year rise for at least four years in how much shoppers spent on groceries – 5.1 per cent last month – sales grew at just 2.5 per cent in the four weeks ending 12 August.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “It’s a bit of a reality check after two months of really impressive growth, as shopping patterns were disrupted by the return of cooler weather and people going on their summer holidays.

“Although the market has recovered from the low point 12 months ago, the return of inflation and rising concerns about the economy mean the weekly grocery shop is now the most popular target for people to cut down on household expenses.

“Thirty per cent of Britons now admit to buying cheaper grocery brands to save money.”

Click here to ‘Like’ The Scotsman Business on Facebook